Monday, March 21, 2011

Stockcharters Review - It's been a while!

I hadn't realised how long ago I last did this... Hardly "Weekly"!

At the moment the sort feature isn't working at Stockcharts.com, so I'll just take the ranking as it comes.

First up is Richard Lehman of www.channelist.com. His current Dow chart shows an upside channel break on the 60-minute timeframe, so maybe there is more to this bounce than meets the eye.

3/16 -- Selling intensified with global uncertainties, bringing several indexes to their long term support lines. The Dow, SPX and XLF all came to, or very close to, their long term uptrend lines. That is actually a good thing from the perspective of setting up a buy signal. VIX futures are at 3-4 points discount, suggesting that the market is quite oversold now and may be preparing to bounce. I'd remain bullish, until any major index actually breaks the long term uptrend line, as that will be a whole new ball game.

3/10 -- After failing for two days to break the purple downtrend line to the upside, the Dow finally succumbed in a big sell-off precipitated by negative employment news. The blue mini broke and was retested today as the Dow swooned. The most likely short term support target now would be the lower purple line -- currently about 150 Dow points below today's closing price.

A number of other short term charts broke, including gold. That suggests the correction has a ways to go.


Next we have Yong-Pan of Cobrasmarketview. His market sentiment is neutral on the short term and a neat 50:50 between neutral and bearish signals on the intermediate time frame.


His automated system is not showing a short signal, despite recent losses (although probably 'smart' of it not too)


Volatility has reverted to mean, but the trend is higher (which is usually - but not always - bearish).


Have Treasury yields faked out?


Robert New of TheInformedTrader.com is looking to strong support at the December breakout gap for the Nasdaq.


Keep an eye on the Transports. No thriving economy can perform without the Transports at new highs.


The Nasdaq 100 has an alternative trendline to look too should 2007 highs fail as support (other indices have similar trendlines to look too, but the Nasdaq 100 has been the only index to break 2007 highs and hold it).


More to follow if I have time....

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Zignals Trading Strategy Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

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